TaxTMI 
TaxTMI 
2024 (7) TMI 886
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....Ld. CIT(A) erred in not admitting the additional evidence filed by the Appellant. 2. The Ld. CIT(A) failed to appreciate that its case falls within the sub-clause (c) and (d) of Rule 46A of the Income Tax Rules, 1962 ("the Rules") to the Act. GROUND NO. II: VIOLATION OF PRINCIPLES OF NATURAL JUSTICE: 1. On the facts and in circumstances of the case and in law, the Ld. CIT (A) erred in violating the principles of natural justice, inter-alia, on the following grounds: i. The Ld. CIT(A) erred in passing the impugned order without appreciating and referring to the documents placed on record in the course of Assessment Proceedings and in the course of Appellate Proceedings - ii. The Ld. CIT(A) failed to provide an opportunity to the Appellant to rebut the contentions of the AO in the remand report. iii. The Ld. CIT (A) erred in passing the impugned order without providing an opportunity of personal hearing through video conferencing to the Appellant, despite the specific request of the Appellant. 2. The Appellant, therefore, prays that the impugned order passed in gross violation of the principles of natural justice be held ....
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....ellant prays that the Ld. CIT(A) be directed to delete the addition amounting to Rs. 1,85,00,600/- u/s. 56(2)(viib) of the Act. 4. Without prejudice, the Appellant prays that the Ld. CIT(A) be directed to delete the addition pertaining to premium on issue of shares to Non-residents amounting to Rs. 32,500/- u/s. 56(2)(viib)of the Act. GROUND NO. VI: ERROR IN COMPUTATION OF TOTAL INCOME AND TOTAL TAX LIABILITY: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the AO in erroneously computing the total income and the total tax liability for the year under consideration. 2. The Ld. CIT(A) upheld the erroneous action of the AO in calculating the total tax payable by the Appellant taking into consideration the incorrect figure of loss assessed under the head Income from Business or Profession., 3. The Appellant prays that the Ld. CIT(A) be directed to compute the correct total income and total tax liability/refund in accordance with the provisions of the Act." 2. The brief facts of the case are that the assessee is a developer and developing the project in Mulund and assessee is as w....
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....allowable @60%. TO 25%. In fact, the Tribunal while concluding as hereinabove, had taken support of the judgment of the Hon'ble High Court Bombay in the case of CIT Vs. Saraswat Infotech Ltd. [ITA (L) No. 1243 of 2012; dated 15.01.2013]. Apart there from, we find that further in the following cases also the coordinate benches of the Tribunal had concluded that depreciation on software expenses is allowable @ 60%: "(i) Srinivasa Resorts Vs ACIT (41 taxmann.com 350)(Hyd-Trib) (ii) Ushodaya Enterprises Limited 938 ITRE (T) (Hyd-Trib) (iii) ACIT Vs. Zydus Infrastructure (P) Ltd (72 taxmann.com 199) (Ahd-Trib)" 16. We are persuaded to subscribe to the view taken by the aforesaid coordinate benches of the Tribunal and respectfully follow the same. Further, as observed hereinabove, the assesses claim of depreciation on software expense @ 60% which was allowed by the CIT(A) had also been accepted by the revenue and the same had also not been carried any further in appeal before the Tribunal. In terms of our aforesaid observations, we are of the considered view that the assessee had rightly claimed depreciation on computer software @, 60%. We thus set....
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.... is treated as a fixed asset. The same applies to the operating system of a computer. Where the software is not an integral part of the related hardware, computer software is treated as an intangible asset." 6.10 In view of above, the contention of the appellant is not found to be acceptable. Therefore, disallowance of depreciation of Rs. 84, 40, 051 /- by the AO is upheld. 6.11 Accordingly, the Ground No. I is dismissed." 6. We heard the rival submission and considered the documents available in the record. The assessee purchased two software - (i) Office STD 2013 SNGLMVL; and (ii) Prjct 2013 SNGLMVL. In support of the order of co-ordinate bench specifically mentioned that the software is guiding the hardware and also an integral part of the hardware. Considering the order of the co-ordinate bench in assessee's own case (supra), in our considered view, the assessee has rightly claimed deprecation @60% and the addition of Rs. 84,40,051/- is deleted. In the result, ground No.III of the assessee is allowed. Ground IV : DISALLOWANCE OF SALES PROMOTION EXPENSES AMOUNTING TO Rs. 94,98,268/-: 7. The Ld.AR argued that assessee is in business....
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....y of AS-7 and percentage completion method of accounting in the case of the assessee is without any basis. We also find that the assessee has been consistently following project completion method of accounting since the very inception of its business. The said method of accounting has been consistently accepted as such by the AO in assessments framed u/s 143(3)of the Act over the past years. As such, the same method should have also been accepted for AY 2008-09, there being no change in facts and circumstances vis-a-vis the past years. We are placing reliance on the Judgment of Hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT [1992) 60 Taxman 248/193 ITR 321 (S.C) wherein it is held that in the absence of any material change in facts, a different view than taken in earlier years could not be taken: "We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed....
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.... the rival submission and considered the documents on the record. The moot point of this issue is whether AS-7 will be applicable in case of assessee or not? As per the documents, we perused that the assessee is purely a civil construction developer and running the project at Mulund. The AS-7 is purely effective for the contractor in construction not for developers. We respectfully followed the judgement of co-ordinate bench of ITAT, Mumbai Bench in the case of Layer Exports P Ltd (supra). So the question of capitalizing the project cost of sale promotion is unjustified. We set aside the appeal order on this issue and the addition of Rs. 94,98,268/- is deleted. In the result, ground No.IV of the assessee is allowed. Ground V: ADDITION OF SHARE PREMIUM UNDER SECTION 56(2)(viib) OF THE ACT: 10. The assessee is engaged in the business of real estate and during the impugned assessment year, the assessee allotted equity shares to following companies at issue price of Rs. 75/- per share comprising face value of Rs. 10 per share and premium of Rs. 65/- per share: 1. Foglight Investment Limited - 1000 2. Board Street Investments (Singapore) Pte Ltd - 450 ....
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....ann.com 97 (Delhi) it was noted that: "34. In any case, if law provides the assessee to get the valuation done from a prescribed expert as per the prescribed method, then the same cannot be rejected because neither Assessing Officer nor the assessee have been recognized as expert under the law. 16. The Coordinate Bench of the Tribunal while lying down the above ratio has also considered t) decision of the Coordinate bench in Agro Portfolio Pvt. Ltd. v. ITO which has been relied I the CIT(A)." The ld. AO cannot take away the option granted by the Statute to the assessee for adopting a method of valuation. The ld. AR relied on the following orders: - In the case of Vodafone M-Pesa v. PCIT [2018] 256 taxman 240 (Bom. HC), it is noted that, "The Commissioner in the impugned order does not deal with the primary grievance of the assessee. This, even after he concedes with the method of valuation namely, NAV Method or the DCF Method to determine the fair market value of shares has to be done/adopted at the assessee's option. Nevertheless, he does not deal with the change in the method of valuation by the Assessing Officer which has resulted in the demand. There....
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....sting shareholder holding 100% equity and therefore, there is no change in the interest or control ove the money by such issuance of shares. The object of deeming an unjustified premium charged o, issue of share as taxable income under Section 56(2)(viih) is wholly inapplicable for transaction between holding and its subsidiary company where no income can be said to accrue to the u/fimati beneficiary, i.e., holding company. The chargeahility of deemed income arising from transaction. between holding and subsidiary or vice versa militates against the solemn object of Section 56(2) (viib) of the Act." 12. The Hon'ble Bench had during the course of aforesaid hearing, directed the Appellant to furnish the basis and working papers for arriving at a valuation of Rs. 65/- per share, a comparison of projected v/s actual cashflows, and shareholding structure of the Appellant and its subsidiaries in relation to the said ground of appeal. Accordingly, the matter was kept part heard and the was subsequently listed for hearing on June 27. 2024. 13. Now, during the course of hearing on June 27. 2024. the ld. AR at the request of the Hon'ble Bench, submitted the basis of projections....
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....ent valuer as per the qualification given in the Rule 11U.Here, in this case, Assessing Officer has tinkered with DCF methodology and rejected by comparing the projections with actual figures. The Rules provide for two valuation methodologies, one is assets based NAV method which is based on actual numbers as perlatest audited financials of the assessee company. Whereas in a DCF method, the value is based on estimated future projection. The Rules provide for two valuation methodologies, one is assets based NAV method which is based on actual numbers as per latest audited financials of the assessee company. Whereas in the DCF method, the value is based on estimated future projection. These projections are based on various factors and projections made by the management and the Valuer, like growth of the company, economic/market conditions, business conditions, expected demand and supply, cost of capital and host of other factors. These factors are considered based on some reasonable approach and they cannot be evaluated purely based on arithmetical precision as value is always worked out based on approximation and catena of underline facts and assumptions. Nevertheless, at the time w....